India’s automotive sector projects a ₹25,000 crore ($3 billion) profit decline for fiscal year 2026. The Environment Protection (End-of-Life Vehicles) Rules, 2025, mandate environmental compensation for vehicles sold in previous years.
This retroactive policy forces manufacturers to make substantial budgetary provisions for Extended Producer Responsibility (EPR). The Society of Indian Automobile Manufacturers (SIAM) warned that the sudden financial burden creates significant market uncertainty.
Reduced profits may limit industry investment in new technologies and growth initiatives. The accounting shift impacts both domestic and international firms operating in India’s consumer discretionary sector.